Buy CESC at a target price of 449: Angel Broking

By SiliconIndia   |   Tuesday, July 28, 2009   |    2 Comments
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Bangalore: Angel Broking has recommended a buy rating on CESC with a target price of Rs. 449. According to the brokerage firm, the growth in net revenue of CESC by 4.7 percent year-on-year (yoy) to Rs. 820 crore in the first quarter of financial year 2010 (Q1FY10) was in line with the estimates. It also expects CESC to record a compound annual growth rate (CAGR) of 13.9 percent in its top-line over FY2009-11, while the bottom-line would post a CAGR of five percent in the same period. The 52 week stock price chart is on the left. CESC clocked a 64.8 percent increase in its operating profit to reach Rs. 201 crores during the last quarter. The company's operating profit margin (OPM) for the quarter expanded by 890 basis points (bps) to 24.5 percent primarily on account of a 55.1 percent decrease in other expenses to Rs. 96 crores. If the stock is bought at Monday's closing price of Rs. 308.45, the percentage of gain would be 45.56 percent. CESC is engaged in the business of generation and distribution of electricity within the licensed are of 567 square kilometers in the city of Kolkata and its adjoining areas. The Company has four coal-based generating stations at Budge Budge, Southern, Titagarh and New Cossipore. The Company operates in three segments viz. power, which includes generation and distribution of electricity; retail, which is engaged in organized retailing, and property, involving property development.
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